HPE Reports Strong Q1 2025 Results as Server Sales Surge 29%
Hewlett Packard Enterprise (HPE) delivered a strong start to fiscal 2025, reporting $7.9 billion in revenue, a 16% year-over-year increase. The company saw particularly strong performance in its server division, which grew 29% YoY to $4.3 billion, driven by heightened demand for AI and cloud infrastructure. Despite challenges in certain segments, HPE’s hybrid cloud division also posted 10% growth, while annualized revenue run-rate (ARR) climbed 45% to $2.1 billion.
The quarter’s profitability was mixed, with GAAP gross margins at 29.2%, a decline of 720 basis points from last year, reflecting cost pressures. GAAP diluted EPS reached $0.44, up 52% YoY, while non-GAAP EPS hit $0.49, a 2% increase. Meanwhile, cash flow from operations came in at -$390 million, reflecting increased investments. Looking ahead, HPE expects Q2 revenue between $7.2 billion and $7.6 billion, with full-year revenue growth forecasted at 7-11%.
HPE’s server business was the standout performer, benefiting from surging enterprise AI and cloud workloads. However, the Intelligent Edge segment declined 5% YoY, while Financial Services remained flat. The company also continues to navigate regulatory challenges surrounding its $14 billion acquisition of Juniper Networks, with legal proceedings scheduled to begin in July 2025.
• Q1 revenue: $7.9 billion, up 16% YoY
• Server revenue: $4.3 billion, up 29% YoY
• Hybrid Cloud revenue: $1.4 billion, up 10% YoY
• Annualized revenue run-rate (ARR): $2.1 billion, up 45% YoY
• GAAP diluted EPS: $0.44, up 52% YoY
• Non-GAAP EPS: $0.49, up 2% YoY
• Cash flow from operations: -$390 million
• Q2 revenue guidance: $7.2B to $7.6B
• Full-year revenue forecast: 7-11% growth
CEO Antonio Neri expressed confidence in HPE’s momentum:
“HPE achieved our fourth consecutive quarter of year-over-year revenue growth, driven by record server demand. While we faced challenges in certain areas, our focus on innovation and disciplined execution positions us for sustained success in 2025.”